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Media &
Entertainment
September 2006
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Contents
• Market Overview
• Government regulations & policy
• Advantage India and business
opportunities
MEDIA &
ENTERTAINMENT
www.imacs.in
Market
Overview
• Market Overview
• Government regulations & policy
• Advantage India and business opportunities
MEDIA &
ENTERTAINMENT
MEDIA &
ENTERTAINMENT
www.imacs.in
Market Overview
Indian Media & Entertainment Industry Zooming ahead
India Media & Entertainment Industry
INR Billion
1000
CAGR 19%
562
473
600
400
200
0
•
•
•
•
•
•
•
837
800
402
353
*
686
*
E*: Estimate, F*: Forecast
2005E 2006F 2007F 2008F 2009F 2010F
Years
Current Market Size is estimated at USD 7.72 bn
Expected to reach USD 18.32 bn by 2010, a CAGR of 19%
Maximum growth expected in Television and Film segments
More than 300 national and regional TV channels
Close to 1000 films made every year
Liberal FDI policies across all the segments of the industry
Government focusing on regulations to give further impetus to the industry
Source: IMaCS Analysis, FICCI-PWC Frames 2006 Report
MEDIA &
ENTERTAINMENT
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Market Overview
Major constituents
• Television is the largest segment with close
Breakup of Indian Media & Entertainment Industry
Outdoor Advertising
2.5%
Live Entertainment
2%
Internet Advertising
0.3%
• Television’s share expected to increase to
Television
Print Media
41.9%
30.9%
Radio
0.8%
Films
Music
19.3%
2.0%
Source: Industry estimates, IMaCS Analysis
to 42% share in industry revenues followed
by print media at 30.9% and films at 19.3%
in 2005
more than 50% by 2010 at the cost of print
media’s share
MEDIA &
ENTERTAINMENT
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Market Overview
Key Drivers of the Indian Media &
Entertainment Industry
• Enabling regulations related to broadcasting,
print and radio by the Government
Regulation
• Development of content for niche viewers
• Pricing remains a key driver, whether it is for
Content
Consumerism
• Increased consumerism and increased
Key
Drivers
advertisement spend by marketers (i.e.more
revenues for media companies) fueling further
growth
Advertising
Pricing
spend
Technology
cable subscription, film tickets or newspaper
prices
• Use of technology for special effects, animation
and other creative work leading to better
quality of media products
MEDIA &
ENTERTAINMENT
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Market Overview
Indian Television Industry Wholesome entertainment
Projected size of Indian Television Industry
500
INR Billion
TV Software
5%
427
400
327
TV
250
300
200
Indian Television Industry Revenue Breakup - 2005
170
148
203
Advertising
37%
100
0
2005E
2006F
2007F
2008F
2009F
20 10F
E*: Estimate
F*: Forecast
Years
• Largest segment in the industry with market size of USD 3.24 bn in 2005
• Expected to reach USD 9.34 bn by 2010, a CAGR of 24%
• Subscription accounts for 58% of the total revenues followed by advertising
and software
• India currently has 105 million TV households and over 60 million cable
connections
• TV penetration expected to increase to 135 million households and cable
connections to 85 million households by 2010
Source: IMaCS Analysis
TV
Subscription
58%
MEDIA &
ENTERTAINMENT
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Market Overview
What do the viewers watch in India?
Genrewise Television Viewership Share in India
3%
4%
1%
2%
8%
39%
5%
Mass Entertainment
Hindi Film Channels
Kids Channels
Regional Channels
English Entertainment
Music Channels
News Channels
Sports Channels
38%
• Mass Entertainment Hindi and regional language channels attract almost 80% of the total
TV viewership in India
• Niche channels like News and Sports gaining ground
Source: TAM Media Research
MEDIA &
ENTERTAINMENT
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Market Overview
Indian Film Industry The Bollywood dreams
Density of Film Theatres - India & Abroad
Projected size of Indian Television Industry
2010F
Years
•
•
•
•
•
•
12
20
0
Largest number of films produced in the world~1000 films every year
More than 3 billion tickets sold in 2005
Gross revenues of over USD 1.49 bn in 2005
Expected to reach USD 3.35 bn by 2010, a CAGR of 18%
Large scope for growth in number of screens
Digitisation of theatres and growth of multiplexes fueling further growth
Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report & UNESCO
India
2009F
30
US
2008F
52 53
France
2007F
45 46
61
Denmark
2006F
40
43
Ireland
2005E
60
Italy
0
77
80
Spain
50
100
Germany
68
79
1 53
Belgium
100
1 13
97
132
120
UK
INR Billion
CAGR 18%
1 50
Screens/ million
population
117
200
MEDIA &
ENTERTAINMENT
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Market Overview
Hit or flop Breakup of Indian films market
Breakup of Films Market in India
8%
1%
15%
45 %
Hindi
Cro ssover Hindi
Tamil
Telugu
Foreign
Malayalam
B engali
Others
17%
1 0%
•
•
•
•
2% 2%
Hindi films account for almost half of the total market
Foreign films, primarily from Hollywood have a market share of 2%
Regional language films account for the rest of the market
Dubbed Hollywood films a new trend
Source: IMaCS Analysis, Industry estimates
MEDIA &
ENTERTAINMENT
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Market Overview
Indian Music Industry Soul searching
Projected size of Indian Music Industry
Gerewise Music Sales in India - 2005
INR Billion
7.6
7.4
7.4
7.4
7.3
7.2
7.2
7.0
8%
7%
10%
7.2
40%
7.0
E*: Estimate
F*: Forecast
6.8
2005E 2006F
2007F 2008F 2009F 2010F
8%
6%
Years
• Unique structure with film and devotional music
•
•
•
•
21%
New Film Music
dominating the market
Popular Music
Non-film albums and remixed songs gaining market
Others
Total revenues close to USD 0.15 bn in 2005
Expected to reach USD 0.16 bn by 2010, a CAGR of 1%
Government and industry taking firm action to reduce
piracy of all forms
International
Old Films Music
Devotional
Regional Film Music
Source: IMaCS Analysis, Industry estimates
MEDIA &
ENTERTAINMENT
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Market Overview
Indian Radio Industry Singing a growth tune
India has over 190 million radio sets reaching 99% of the population
More than 330 FM Radio licenses being allotted by the Government (~240 already allotted)
Move from license fee to revenue share model to give a further boost to the industry
New platforms to access radio like satellite radio, mobile phone radios and internet radio growing fast
Revenues in 2005 - USD 0.06 bn
Expected revenues in 2010 - USD 0.26 bn, a CAGR of 32%
Ad spend on radio set to increase with more FM radios operational
Projected size of Indian Music Industry
3.0
3.7
5.5
2005E
2006F
2007F
2008F
2009F
Years
2010F
9%
10%
Global 8%
1%
E*: Estimate
F*: Forecast
Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report
7%
5%
0%
0.0
13%
15%
Source: IMaCS Analysis
India
5.0
8.0
12.0
Australia
10.0
10.0
Spain
CAGR 32%
20%
20%
USA
INR Billion
15.0
Share of total ad
spend
Global ad Spend on Radio
Sri
Lanka
•
•
•
•
•
•
•
MEDIA &
ENTERTAINMENT
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Market Overview
Indian Print Media Industry Reader’s choice
Leading Newspapers in India
• More than 220 million readers of English and
• English language newspapers and magazines
• Newspapers account for 90% of the market,
Magazines~10% market share
• Revenues expected to grow from USD 2.38 bn in
2005 to USD 4.37 bn in 2010
21.0
13.8
10.9
10.8
10.4
10.4
9.6
9.4
Rajasthan Patrika
English
Times of India
The Hindu
Hindustan Times
• Subscriptions contribute 57% of the total revenues,
rest by Advertisement
7.4
4.1
3.9
Projected size of Indian Music Industry
250
INR Billion
number of strategic overseas investments
21.2
Dainik Bhaskar
Eenadu
Lokmat
Amar Ujala
Hindustan
Daily Thanthi
Dinakaran
readership close to 10% of the total base
• Print media, especially newspapers, attracting a large
Readership (Million)
Vernacular
Dainik Jagran
vernacular language newspapers and magazines
200
150
109
12 1
135
2005E
2006F
2007F
153
173
195
100
50
0
Source: NRS 2006
Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report
2008F
2009F
Years
E*: Estimate, F*: Forecast
20 10F
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MEDIA &
ENTERTAINMENT
Government
regulations & policy
• Market Overview
• Government regulations & policy
• Advantage India and business opportunities
MEDIA &
ENTERTAINMENT
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Government regulations & policy
FDI Regulations for Indian Media &
Entertainment Industry…1
Guidelines for Foreign Direct Investment in the Indian Media & Entertainment Industry
1. Advertising
FDI is permitted upto 100% through the automatic route
2. Films
FDI is permitted for the full value chain like film financing, production, distribution, exhibition and
marketing upto 100% through the automatic route
3. Print Media
(a) FDI up to 100% is permitted in publishing/printing scientific & technical magazines, periodicals &
journals
(b) FDI up to 26% is permitted in publishing News Papers and Periodicals dealing in News and
Current Affairs subject to a few conditions
Source: IMaCS Analysis
MEDIA &
ENTERTAINMENT
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Government regulations & policy
FDI Regulations for Indian Media &
Entertainment Industry…2
Guidelines for Foreign Direct Investment in the Indian Media & Entertainment Industry
4. Broadcasting
a)TV Software Production
100% foreign investment allowed subject to a few conditions
b) Setting up hardware facilities, such as uplinking, HUB, etc.
FDI allowed upto 49% (inclusive of both FDI and portfolio investment) of paid up share capital
c) Cable Network
FDI allowed upto 49% (inclusive of both FDI and portfolio investment) of paid up share capital.
d) Direct-to-Home
Maximum foreign investment of 49% paid up share capital include
e) Terrestrial Broadcasting FM
Foreign investment is permissible to the extent of 20% (including portfolio investment,
investment by OCB/NRI/PIO etc.) of the paid up share capital of the company. The licensee
should be a company registered in India under the Companies Act.
f) Terrestrial TV
No private operator is allowed in terrestrial TV transmission.
g) Establishment and Operation of Satellite
FDI up to 74% is permitted with prior Government approval
Source: IMaCS Analysis
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MEDIA &
ENTERTAINMENT
Advantage India and
business opportunities
• Market Overview
• Government regulations & policy
• Advantage India and business opportunities
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MEDIA &
ENTERTAINMENT
Advantage India & business opportunities
Advantage India
• Second fastest growing economy in the world
• Favourable FDI policies for all the segments of Media & Entertainment Industry
• Regulatory environment being strengthened for faster growth of the industry
• High quality of creative and technical talent pool
• Large untapped potential especially in Television and Films
• Indian consumers willing to spend more on entertainment
• Growing middle class with more disposable income
MEDIA &
ENTERTAINMENT
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Advantage India & business opportunities
Business opportunities in the Indian
Media & Entertainment Industry…1
Television
•
•
•
•
•
•
Production/co-production of content
Broadcasting of TV channels
Distribution of TV channels through cable and new delivery platforms like DTH and IPTV
Technology transfer for digital content creation
Marketing of TV rights/air times
Strategic investment in existing companies in broadcasting, distribution and content
Radio
• Investment in FM and Satellite Radio
• Content creation for radio channels
• Marketing of air times
MEDIA &
ENTERTAINMENT
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Advantage India & business opportunities
Business opportunities in the Indian
Media & Entertainment Industry…2
Films
•
•
•
•
•
•
Production/co-production of films
Processing, distribution and exhibition of Bollywood films
Shooting of overseas films in India
Development, distribution and exhibition of Hollywood/overseas films
Training for technical and functional areas of film making
Supply of Hardware to film studios
Music
• Creation of content for film and non-film music
• Marketing of film and non-film music
• Strategic investment in local music companies
Print
• Strategic investment in news and non-news publications
• Tie-ups for providing content to Indian publications
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MEDIA &
ENTERTAINMENT
Advantage India & business opportunities
Key Players - Indian Film Industry
MEDIA &
ENTERTAINMENT
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Advantage India & business opportunities
Key Players Indian Television & Radio Industry
Doordarshan is the largest TV network in India with 19 channels reaching 90%
of the population through 1400 transmitters
News Corporation owned Star TV Network entered India in 1991 and offers more than
10 channels in mass entertainment, sports, news,, music, movies etc.
Zee is one of the pioneers of the Indian Television industry with 22 channels in its
bouquet. It is present in broadcasting, cable distribution, production and distribution
of films, creation of animation software among others
Sony Pictures Entertainment is present in India with 3 channels focusing on
Hindi entertainment and sports
Sun Network is based in South India with 14 channels in four languages and a focus on
entertainment, news, movies, music, kids shows among others. Also present in FM Radio
Walt Disney is present in India through two kids channels and has recently
bought one more kids channel
All India Radio, owned by Government of India is the largest radio network in India
with 214 broadcasting centres covering more than 99% of the Indian population
MEDIA &
ENTERTAINMENT
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Advantage India & business opportunities
Key Players Indian Music Industry
BMG is one of the earliest music companies to enter India in a joint venture with
Crescendo, an Indian company
EMI owned Virgin Records is another international music company operating in India
Universal is one of the leading names in Indian music industry with a strong
presence across all genres
Sony is one of the leading music companies of India with a presence in both
Indian and International albums
Saregama, formerly known as The Gramophone Company of India Ltd. is India’s
oldest music company with largest repertoire of music across all genres and languages
including top-recording artistes of the past hundred years
MEDIA &
ENTERTAINMENT
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Advantage India & business opportunities
Key Players Indian Print Media Industry
One of the leading English dailies owned by Bennett, Coleman & Co, a leading
media group of India
Another leading English newspaper with multiple editions published from
many states in India
One of the oldest newspapers with a strong presence in South India
Hindustan Times is another leading English newspaper with more than 4 million
readership mostly in North India
Published in English and Malayalam, this newspaper enjoys a strong readership in
South India. It also publishes a large number of well known magazines in English
and regional languages
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The India Brand Equity Foundation is a public-private partnership
between the Ministry of Commerce & Industry, Government of India
and the Confederation of Indian Industry. The Foundation’s primary
objective is to build positive economic perceptions of India globally
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Tel +91 124 401 4087, 4060 - 67
Fax +91 124 401 3873
Email [email protected]
Web www.ibef.org
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Disclaimer
This publication has been prepared by ICRA Management Consulting Services (IMaCS) for the India Brand
Equity Foundation (“IBEF”).
All rights reserved. All copyright in this publication and related works are jointly owned by IBEF and IMaCS.
The same may not be reproduced, wholly or in part in any material form (including photocopying or storing
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This publication is for information purposes only. While due care has been taken during the compilation of
this publication to ensure that the information is accurate to the best of knowledge and belief of IBEF and
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